Wealth management arm helps Morgan Stanley to beat profit estimates
Morgan Stanley reported a dip in profits during the last three months, but followed several of its big banking peers this week by trumping Wall Street estimates.
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The US multinational group posted earnings of $2.2bn (£1.76bn), or $1.23 a share, falling from $1.30 per share a year ago but outperforming the $1.14 estimate from analysts surveyed by Refinitiv.
The firm’s wealth management arm reported a seven per cent rise in pre-tax profits when compared with the previous year, while net revenues in investment management soared 21 per cent.
Boss James Gorman has been ramping up the firm’s focus on its wealth management division in recent months.
Overall sales and trading revenue dipped 12 per cent, as bond and equity trading both suffered a dip in growth.
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The financial report, which come days after a trio of Wall Street banks posted a mixed set of quarterly earnings results, underlines the current challenges financial institutions are facing in the wake of rising trade tensions between China and the US.
Expectations of a cut in interest rates has also dented confidence in the banking sector.
Rising markets helped in “both the wealth business, in terms of the assets we manage, as well as our investment management business, it’s fee times the balances,” chief financial officer Jonathan Pruzan told CNBC.